You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
Alexander & Baldwin Inc (NYSE:ALEX) has experienced a decrease in hedge fund sentiment in recent months. There were 11 hedge funds in our database with ALEX holdings at the end of the previous quarter. At the end of this article we will also compare ALEX to other stocks including FTI Consulting, Inc. (NYSE:FCN), Franklin Electric Co. (NASDAQ:FELE), and G&K Services Inc (NASDAQ:GK) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Keeping this in mind, we’re going to take a gander at the fresh action regarding Alexander & Baldwin Inc (NYSE:ALEX).
How have hedgies been trading Alexander & Baldwin Inc (NYSE:ALEX)?
Heading into the fourth quarter of 2016, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a decline of 18% from the second quarter of 2016. The graph below displays the number of hedge funds with bullish position in ALEX over the last 5 quarters. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Emanuel J. Friedman’s EJF Capital has the largest position in Alexander & Baldwin Inc (NYSE:ALEX), worth close to $91.6 million, corresponding to 7.4% of its total 13F portfolio. Sitting at the No. 2 spot is Jeffrey Furber of AEW Capital Management, with a $45.7 million position; the fund has 1% of its 13F portfolio invested in the stock. Some other members of the smart money that hold long positions encompass Renaissance Technologies, which is one of the largest hedge funds in the world, Cliff Asness’ AQR Capital Management and David Costen Haley’s HBK Investments. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Because Alexander & Baldwin Inc (NYSE:ALEX) has witnessed a decline in interest from hedge fund managers, it’s easy to see that there was a specific group of money managers who sold off their full holdings by the end of the third quarter. At the top of the heap, David Cohen and Harold Levy’s Iridian Asset Management dumped the largest investment of the 700 funds studied by Insider Monkey, valued at close to $0.7 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace LLP was right behind this move, as the fund said goodbye to about $0.2 million worth of shares.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Alexander & Baldwin Inc (NYSE:ALEX) but similarly valued. These stocks are FTI Consulting, Inc. (NYSE:FCN), Franklin Electric Co. (NASDAQ:FELE), G&K Services Inc (NASDAQ:GK), and Advanced Energy Industries, Inc. (NASDAQ:AEIS). This group of stocks’ market valuations are similar to ALEX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FCN | 14 | 52887 | -4 |
| FELE | 8 | 127217 | -3 |
| GK | 11 | 169989 | 0 |
| AEIS | 16 | 151847 | 0 |
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $125 million. That figure was $150 million in ALEX’s case. Advanced Energy Industries, Inc. (NASDAQ:AEIS) is the most popular stock in this table. On the other hand Franklin Electric Co. (NASDAQ:FELE) is the least popular one with only 8 bullish hedge fund positions. Alexander & Baldwin Inc (NYSE:ALEX) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard AEIS might be a better candidate to consider taking a long position in.
Disclosure: None
